“Just do what’s right,” Apple’s co-founder Steve Jobs reportedly advised Tim Cook, his successor as CEO of Apple Inc.
That’s how shift happens.
Cook proved his inner boldness this week in a major shift with the late Jobs’ philosophy. He announced the company’s new dividend and buyback plan, essentially bringing sexy back to the musty old dividend.
The quarterly check, one seen as taboo for tech companies, is now cool again.
This is an extraordinary move for a company that is still in high growth mode. In the past, issuing regular payments to stockholders has signaled that growth mode is over and a company's best days may be behind. Other sleek tech companies like Google and Amazon don’t pay a dividend.
Cook begs to differ. And he does so with precision.
In Monday’s teleconference with New York analysts, he frontloaded his announcement with influential buzzwords, such as:
The last comment is another telling departure from Steve Job’s approach. Jobs famously loathed corporate IT buyers. Cook emphasizes their importance.
Apple was hoarding a ridiculously large cash reserve – at last count, $97.6 billion – the largest reserve of any non-financial organization in the U.S. To put that number in context, Apple's reserve was larger than the entire market value of 485 of the 500 companies in the Standard & Poor Index.
The measure of any communication is the listeners’ response. Wall street responded by pushing Apple shares to a record $601.10, its first-ever close above $600. And Cook’s message is also resonating with large fund families such as Vanguard and Fidelity, whose rules previously prevented them from including stocks that didn’t pay a dividend. They're now eager to include Apple in their funds.
Sure, there are grumblers. Some analysts are disappointed with the size of Apple’s 1.8 percent divided. In comparison, Hewlett-Packard pays 2 percent and Microsoft pays 2.5 percent.
But as Cook summed up his announcement, he noted, “Simply stated, we don’t see ceilings to our opportunities.” The same can be said about Cook. He appears to be fueled by an inner boldness to do what’s right; he delivered a compelling message that resonated with his target audience; and he gained their commitment.
Like his predecessor, the late, great Steve Jobs who handpicked him, it appears that Tim Cook is a true influencer.